from Reverse Mortgage Daily August 17, 2009

Consumer Reports is back and they’ve decided to jump on the Claire McCaskill bandwagon attacking reverse mortgages in their September 2009 edition. Consumer Reports calls Reversals of fortunes an “investigative” report on reverse mortgages but it’s nothing more than a one sided argument against the product. The article is perfectly crafted to ensure the reader has a gut wrenching feeling when they see a picture of Earl Minor holding a picture of his wife who passed away in a few years ago. In 2005, the Minor’s decided to use a reverse mortgage to pay off medical bills. His wife was 86, but Earnest wasn’t yet 62, so the couple wasn’t able to qualify. The broker suggested taking his name off the deed so that the loan would be issued solely to his wife. “The broker told me my name could be put on the mortgage as soon as I turned 62, but that never happened,” Minor says. Unfortunately for Minor, when his wife passed away in 2007, he was notified by Financial Freedom that the death made the mortgage payable and that foreclosure proceedings would begin if he did not refinance or pay off the balance. This is a sad and unfortunate scenario but in the end, Minor didn’t take the responsibility to get onto the loan when he turned 62. When his wife closed on the reverse mortgage, she was able to pay off their $70,000 mortgage balance as well as about $91,700 in medical bills, a new roof, and other expenses. The closing costs totaled up to roughly $15,000, which enabled his wife to receive $161,700. That sounds like a great benefit to me, but instead of recognizing the loan was able to help the couple, Consumer Reports focused on the payoff which totaled more than $200,000. According to Minor, the home is now valued at only $130,000 and he can’t find money to pay off the loan. Attempts to negotiate refinancing or some other solution with lenders have been fruitless. In a letter to Consumer Reports, Financial Freedom said it “acknowledges Mr. Minor’s unfortunate situation and has repeatedly delayed foreclosure—which is required under HUD guidelines—for almost two years since his wife’s passing to allow Mr. Minor time to find a solution.” The article continues to describe other unfortunate scenarios and features plenty of McCaskill plugs. What it doesn’t describe is any positive stories that stem from reverse mortgages. To give everyone a little background on how the article came to fruition, National Reverse Mortgage Lenders Association President, Peter Bell, told attendees at the TMBA event in Austin, TX that he spent four and a half days with Consumer Reports going over the program and answering any questions. He felt confident that the reporter would provide a fair and balanced article but that isn’t what happened. Bell pointed out that the article doesn’t have a byline, which could mean that after the journalist wrote a a balanced article, the editor changed it to reflect their own views. In response, NRMLA plans to send a letter to Consumer Reports and Bell told attendees that borrowers need to do the same. He suggested that lenders sit down with borrowers and explain to them that unbalanced reports like this might scare people who may benefit from a reverse mortgage. “We need to generate dozens if not hundreds of letters to consumer reports,” says Bell. I couldn’t agree more. Letters from borrowers to publications like Consumer Reports or politicians about how reverse mortgages have improved lives will have more of an impact than letters from lenders. Everyone needs to read the article in full, if you don’t subscribe to Consumer Reports you can read the story at the link below.

http://www.consumerreports.org/cro/magazine-archive/september-2009/personal-finance/reverse-mortgages/overview/reverse-mortgages-ov.htm

Loan modification attorneys throughout California are helping people stay in their homes by working on their behalf to negotiate with lenders and get a top flight loan modification for their clients.  A qualified California loan modification attorney can get the best interest rate and the best terms for their clients’ loan modification, helping homeowners to stay in their homes and avoid foreclosure proceedings.

Recently, the federal government has gotten involved in the loan modification industry, hoping to keep as many Americans as possible in their homes.  The Obama Administration came into office in late January, and by February got Congress to pass a number of pieces of legislation promoting loan modifications.  However, their efforts to reduce foreclosures have fallen behind expectations, failing to help as many people as they hoped to.

The federal loan modification program has hit many pitfalls, including the fact that some homeowners are being told they must be behind on their payments to receive help, which runs counter to the goals of the program.  In other cases, the delays are so extensive that borrowers who are current when they begin the process fall behind by the time the process is complete.  There are also issues involving who qualifies under the federal program.  Recently, government agents invited over twenty bank executives to Washington, D.C. to discuss this situation and how to remedy it.

So far, it is estimated that 200,000 homeowners who were behind on their mortgages took advantage of the federal loan modification program.  The goal is to eventually help three to four million people with mortgage loan modifications, but unfortunately they are not on pace to meet that goal.  Some banks, such as Wells Fargo, did not offer loan modifications under the program until June, while others were understaffed to handle the volume of calls and e-mails that they received.  In the meantime, people are suffering pay cuts, spouses losing their jobs, increased interest rates and more.  The federal loan modification program held quite a bit of promise, but it seems the promise has not been able to produce the desired results, or at least the results that everyone was hoping for with the program.  This is in part due to the bureaucracy involved in any government program of this size.

People may now be searching for potential solutions to this challenge.  One obvious solution is to hire a qualified loan modification attorney.  While federal programs have to service millions of people, a loan modification attorney can focus on you, your needs and your house.  A federal program will have dozens of hoops to jump through for every portion of the program, as well as an inefficient way to communicate with you.  Educating the homeowner on how to organize and prepare the loan modification application should involve intensive one on one contact, but a federal agency will not be able to do this.

A California loan modification attorney can sit down with you, explain your options and walk you through the entire loan modification process.

To view loan modification companies reviews visit us at http://www.loanmodificationhelpcenter.org/ or call 800-359-6941.

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Very often, when someone contacts a loan modification attorney they really do not understand how the foreclosure process works or how to stop it.  People who do not understand foreclosure proceedings are often scared, timid and unwilling to do what it takes to stay in their homes.  Many think that if they just ignore their lenders, they will go away.  However, inaction is not any way to respond to a potential foreclosure.  The only way to mount a successful defense to foreclosure proceedings is to know how the process works, and talk to the loan modification attorneys who know how to stop it.

Foreclosure Process

The first step in the foreclosure process begins when a lender files a “Notice of Default” with the county recorder.  This often proceeds a period of non-payment by the borrower, meaning the homeowner is defaulting on the loan by not making payments.  This notice is mailed to the borrower and any other affected parties.  This is in no way the end of the process; in fact, up to five business days before the trustee’s sale, the borrower can pay off the default amount plus any addition fees and/or fines and stop the foreclosure process.  Obviously, very few people can simply cough up the thousands or tens of thousands of dollars it would take to pay this amount.

The second step comes ninety days after the Notice of Default is recorded.  A “Notice of Sale” must be posted on the property and in one local public location, such as a library or town hall.  The Notice of Sale is also published once a week for three weeks in a newspaper of some sort in the area.  The Notice of Sale must clearly state the date, time and location of the sale, as well as the property address, the trustee’s contact information and any other pertinent information.

Step three usually occurs about four months after the foreclosure process began.  The Trustee Sale Auction is held as a public auction at the time and place designated by the Notice of Sale.  It is conducted by the lender’s representative, almost always an attorney, and the successful bidder must pay immediately with cash or a cashier’s check.  The lender often bids in the amount of the balance due plus costs.  If no one else bids (which is usually the case these days), the property reverts to the lender.

Contrary to popular belief, the lender or bank you got your mortgage from does not want your house back.  The entire foreclosure process costs the lender far more than it is worth.  The lender is not only losing money on the four months you aren’t paying your mortgage, but will most likely lose money paid to the attorney who runs the auction.  A loan modification attorney can help you avoid foreclosure and stay in your home.  Both you and your lender are interested in you keeping your home, and a loan modification attorney can help you avoid the headache, heartache and embarrassment of a foreclosure.

To learn more about loan modification process, loan modification programs and view loan modification companies reviews visit Loan Modification Help Center at http://www.loanmodificationhelpcenter.org

The ongoing mortgage crisis means that the number of foreclosures is increasing. With homeowners desperate to avoid foreclosures, there are many scams flourishing that prey on those homeowners that desperately want to hold onto their homes. How do you know if an offer for assistance is legitimate? Often it doesn’t take anything more than old fashioned common sense. Sometimes, however, scam artists are so misleading that it is easy to be confused.

What are the warning signs that a foreclosure company may be a scam?

• Lack of professionalism. This one should be obvious, and, fortunately, many scammers fail to present themselves as professionals, and are easily recognized. Think of how most established businesses advertise. If a company does not use traditional advertising, it should raise a red flag. If you find fliers under your windshield or stuck in your door, someone cold calls your house, or knocks on your door, they are probably not a legitimate agency.
• They ask for large fees in advance. It is a testament to how desperate people are to save their homes that many people, in danger of losing their homes, will pay an exorbitant amount of money to someone they have never heard of that promises to save their home. Often, the scammer asks for a fee that is equal to the homeowner’s equity in the home, and the homeowner hands it over.
• The company asks you to sign your deed over to them. They often have excellent reasons for this, promising to sign the home back over after they stop foreclosure proceedings, and allowing you to “lease” the home from them until this occurs. Not only does the scammer get the deed to your home, which, by the way, does not release you from responsibilities on the loan, they also collect a hefty “lease” fee, at least until they evict you.
• They offer to help you refinance the home. You obtained your mortgage initially, why would you need help to refinance? Typically, the scam company collects a large fee and does nothing. While they do not take over ownership of your home, like some of the more aggressive scammers, they do allow the foreclosure process to proceed. The foreclosure scam companies typically tell you not to contact your lender because they will take care of all communications. Meanwhile, they do nothing, and the lender assumes that you are a deadbeat payer.
• They tell you one thing, but discourage you from reading the contract. People who are successful at operating scams are often smooth talkers. They will tell you one thing, such as negotiating a settlement with your lender, while at the same time presenting you with papers that sign your home over to the scam company.

How can you avoid being a victim of scam foreclosure companies?

• Never sign anything without reading it thoroughly. Do not worry about appearing rude. Read each form completely and do not sign anything that you do not understand. Tell the person you are dealing with that you need to take the paperwork home to review it and show it to a real estate attorney. They will normally review documents for a nominal fee, and can tell at a glance if you are being scammed.
• Understand that verbal agreements are non binding. Do not pay attention to what the person says, but read all documentation carefully.
• Never sign a form that has multiple blanks that can be completed later, and sign your paperwork with blue, not black, ink. This helps prove that paperwork is an original and not a copy.
• Never, ever, sign your deed over to anyone else. Many people fail to realize that the mortgage and the deed are two separate things. You do not eliminate your responsibility with the mortgage by signing over your deed, but you do eliminate your claim to the property.
• Any threats or intimidation should be clear evidence that the foreclosure company is not legitimate.
• Before entering into any agreement regarding your mortgage, take the paperwork to your current lender. They do not want you to be scammed any more than you do, and they are well versed in current scams in your area. Even if you are in the final stages of foreclosure, and feel that the lender has no time for you, ask to speak with someone in the loan or loss mitigation department and show them the documents.
• Remember the same thing that we all learned as children, if something is too good to be true, it probably is.

Foreclosure scams prey on the fear that people have of losing their homes. While there are legitimate companies that help the consumer who is experiencing difficulty paying their mortgage, companies that solicit you are typically scams. To find someone that can help you remain in your home during this difficult time, contact your local HUD office. This federal program offers a variety of ways to deal with your financial problems while avoiding foreclosure. Your lending institution’s loss mitigation specialists can also work with you to keep you in your home.

About Author:
Stephanie Larkin is a freelance writer who writes about topics pertaining to the mortgage industry such as a Mortgage Company